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3 Monster Growth Stocks to Buy From the Drybulk Space, According to One Analyst

Even though COVID still makes headlines, with Delta and other variants, the world is starting to emerge from the economic disruptions of the pandemic. Vaccination programs are expanding, and –
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Even though COVID still makes headlines, with Delta and other variants, the world is starting to emerge from the economic disruptions of the pandemic. Vaccination programs are expanding, and – with the notable exception of Australia – governments are growing leery of imposing strict lockdowns again. The result is a return to economic growth, and a resumption of global trade.

While supply chains still have not returned to normal, some industries are showing impressive gains. Drybulk, the seaborne trade in raw materials carried in bulk lots on freight vessels, is one of these.

Looking at the near- to mid-term prospects for global trade, H.C. Wainwright analyst analyst Magnus Fyhr writes: “…we remain constructive on the outlook for the drybulk market as we believe moderating demand growth coupled with limited fleet growth should result in further tightening of the supply/demand balance and support strong vessel earnings over the next year. While seaborne trade volumes are well above pre-pandemic levels and growth in China is slowing down, commodity demand for the rest of the world is catching up and should support further growth in seaborne trade volumes.”

Fyhr goes on to point out several drybulk equities that he sees continuing to gain in the current trade environment. We are talking returns of at least 40% over the next 12 months. It also doesn’t hurt that each stock is admired by the rest of the analyst community, enough so to earn a “Strong Buy” consensus rating.

StarBulk Carriers (SBLK)

We’ll start with Star Bulk Carriers, a specialist in the drybulk ocean trade. This Greek-based company has an ‘on the water’ fleet of 128 carriers, averaging 9.3 years old and including both the largest Newcastlemax and Capesize carriers for the long hauls as well as the smaller Ultramax and Supramax vessels that hope from port to port along coasts. Shares in Star have gained 188% this year.

The quality of Star’s fleet and capabilities is clear from the company’s financial performance. In early August, Star reported a net profit of $124.2 million for 2Q21, or $1.22 per share. This result represented tremendous gain turnaround from the 46-cent net loss reported in the year-ago quarter, and was up 238% from Q1. At the top line, the $311 million reported revenue was more than double the year-ago figure, and the best quarterly revenue in over two years. The company finished the quarter with $238 million cash on hand.

Star’s sound finances backed the company’s 70-cent per common share dividend. The payment, which was slashed down to just 5 cents during the pandemic crisis, has been raised twice so far this year. The current payment annualizes to $2.80 per common share and gives a solid yield of 4.2%.

Star shares have raced ahead 188% this year, but would you believe it could go up another 45%? H.C. Wainwright's Fyhr does. The analyst rates SBLK a Buy along with a $35 price target. (To watch Fyhr’s track record, click here)

"With most of the fleet operating in the spot market, we believe SBLK is well positioned to capture current strength in the spot market. With an average fleet cash break-even level of $9,800/day, including debt amortization, we believe SBLK is poised to generate significant cash flows in 2021 and 2022. While spot rates are at a ten-year high, we still believe that we are in the early stages of a multi-year cycle as steady demand growth coupled with lower fleet growth should result in improved utilization and firmer charter rates over the next few years," Fyhr opined.

The analyst summed up, "We believe SBLK shares are attractively valued trading at 4.5x our 2021E EV/EBITDA and a 9% premium to our current NAV estimate of $21.63/share compared to the drybulk yield peer group..."

A full house of Buys – 5, in fact – provides the shipping company with a Strong Buy consensus rating from the Street. The average price target comes in at $31.75 and indicates ~31% upside from current levels. (See SBLK stock analysis on TipRanks)

Eagle Bulk Shipping (EGLE)

Next up, Eagle Bulk Shipping, is another major player in the drybulk sector. The company focuses on the shorter-haul trade, with a fleet of Ultramax and Supramax vessels in the 50K to 65K ton deadweight range. Eagle’s fleet comprises 53 vessels totaling 3.2 million tons – and at 8.8 years average, it’s a younger fleet than Star’s above. Eagle’s ships carry a wide range of cargos, including cement and coal, fertilizer and grains, and iron and other ores.

In the second quarter of this year, Eagle posted revenues of $129.9 million, up more than 126% from the year-ago quarter. EPS was down 10 cents sequentially, from 84 cents in Q1 to 74 cents in 2Q21. Higher charter rates this year compared to last year helped to drive the increase in revenues. Eagle reported $83.8 million in cash as of the end of June, as well as an additional $56 million in undrawn credit, to balance $176 million in outstanding debt.

Wainwright’s Fyhr initiated coverage of Eagle with a Buy rating and an $80 price target that indicates potential for 49% growth over the coming year.

Backing this stance, the analyst points to sound fundamentals in the drybulk carrying sector: “With slower fleet growth and robust Chinese demand for iron ore and coal, we expect the drybulk market to continue to improve, albeit at a slower pace than in 2021. While demand growth is expected to exceed supply growth in 2022, we believe much of the demand growth hinges on that drybulk demand recovers in the rest of the world to offset slowing demand in China.”

The analyst added, "We believe EGLE shares offer an attractive play on the drybulk market with a clear focus on the Supramax/Ultramax market segment... We believe EGLE shares are attractively valued trading at 3.1x 2021 EV/EBITDA and 14% discount to our NAV estimate of $59.34/share, which compares favorably to the drybulk peer group..."

Overall, there are only 3 analyst reviews on file for this company, and all agree that the stock is a Buy proposition. EGLE shares are priced at $53.65 with an average target of $70.67 suggesting an upside of ~32% in the next 12 months. (See EGLE stock analysis on TipRanks)

Genco Shipping, Inc. (GNK)

We’ll wrap up with Genco, another operator of high-end, modern bulk carriers. Like Star above, Genco operates a fleet of mixed capacity, from Supramax vessels of 55K deadweight tonnage to the largest oceangoing Capesize carriers.

Genco has seen recent strong gains in revenues and earnings, as well as a sharp increase in share price. GNK is up nearly 190% this year, and the company beat the revenue and earnings estimates in its 2Q21 financial report. That quarterly report showed $121 million at the top line with a net income of $32 million, or 75 cents per share. The EPS was the highest since 2010. Genco finished the second quarter with $161.2 million in cash on the balance sheet.

These sound results are supported by increasing charter rates in the shipping industry, and improved efficiencies in fuel usage. On the latter note, Genco in June entered into a multi-company framework agreement to test the viability of ammonia as an alternative fuel for maritime uses. The feasibility study is part of larger efforts to decarbonize the global bulk carrier fleet.

Since alt fuels are still in the early study stage, Genco is also taking steps to modernize its fleet. The company in May entered an agreement to acquire two new Ultramax vessels in 2022. These new vessels will be constructed in China and delivered to Genco in January of next year. Both new vessels will incorporate fuel efficiency technology to improve operating costs.

For Q2, Genco increased its dividend from 5 cents per common share to 10 cents. This was the second consecutive quarterly dividend increase, and marks a commitment by the company to grow the dividend back to pre-pandemic levels. At the current level, the dividend yield is modest, just under 1%.

Once again, we check in with H.C. Wainwright's Fyhr. The analyst sees Genco holding a solid position in its industry, writing of the company: “We believe GNK shares offer an attractive play on the drybulk market as the Capesize fleet is highly leveraged to Brazilian iron ore exports while the Supramax fleet provides stable cash flows to cover debt service and overhead.… In addition, GNK has installed scrubbers on 17 of its larger Capesize vessels, which we believe could provide additional fuel cost savings. While spot rates are at an eleven-year high, we still believe that this cycle has additional legs as steady demand growth coupled with lower fleet growth should result in improved utilization and elevated charter rates over the next few years.”

In line with these comments, Fyhr starts his overage of the stock with a Buy rating and a $30 price target. If correct, the analyst’s objective could deliver one-year returns of 41%.

All in all, Genco has attracted 6 recent analyst reviews, and these break down 5 to 1 in favor of Buy over Hold, for a Strong Buy consensus. The average price target of $27.33 implies an upside of ~29% for the next 12 months, from the current trading price of $21.22. (See GNK stock analysis on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

The post 3 Monster Growth Stocks to Buy From the Drybulk Space, According to One Analyst appeared first on TipRanks Financial Blog.

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Bolsonaro Indicted By Brazilian Police For Falsifying Covid-19 Vaccine Records

Bolsonaro Indicted By Brazilian Police For Falsifying Covid-19 Vaccine Records

Federal police in Brazil have indicted former President Jair…

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Bolsonaro Indicted By Brazilian Police For Falsifying Covid-19 Vaccine Records

Federal police in Brazil have indicted former President Jair Bolsonaro for falsifying his Covid-19 vaccine card in order to travel to the United States and elsewhere during the pandemic.

Federal prosecutors will review the indictment and decide whether to pursue the case - which would be the first time the former president has faced criminal charges.

According to the indictment, Bolsonaro ordered a top deputy to obtain falsified Covid-19 vaccine records of himself and his 13-year-old daughter in late 2022, right before he flew to Florida for a three-month stay following his election loss.

Brazilian police are also waiting to hear back from the US DOJ on whether Bolsonaro used said cards to enter the United States, which would open him up to further criminal charges, the NY Times reports.

Bolsonaro has repeatedly claimed not to have received the Covid-19 vaccine, but denies any involvement in a plan to falsify his vaccination records. A previous investigation by Brazil's comptroller general concluded that Bolsonaro's vaccination records were false.

The records show that Bolsonaro, a COVID-19 skeptic who publicly opposed the vaccine, received a dose of the immunizer in a public healthcare center in Sao Paulo in July 2021. [ZH: hilarious, Reuters calling the vaccine an 'immunizer.']

The investigation concluded, however, that the former president had left the city the previous day and didn't leave Brasilia until three days later, according to a statement.

The nurse listed in the records as having applied the vaccine on Bolsonaro denied doing so and was no longer working at the center. The listed vaccine lot was also not available on that date, the comptroller general's office said. -Reuters

"It's a selective investigation. I'm calm, I don't owe anything," Bolsonaro told Reuters. "The world knows that I didn't take the vaccine."

During the pandemic, Bolsonaro panned the vaccine - and instead insisted on alternative treatments such as Ivermectin, which has antiviral properties against Covid-19. For this, he was investigated by Brazil's congress, which recommended that the former president be charged with "crimes against humanity," among other things, for his actions during the pandemic.

In May, Brazilian police raided Bolsonaro's home, confiscating his cell phone and arresting one of his closest aides and two of his security cards in connection to the vaccine record investigation.

Brazil's electoral court ruled that Bolsonaro can't run for public office until 2030 after he suggested that the country's voting system was rigged. For that, he has to sit out the 2026 election.

Tyler Durden Tue, 03/19/2024 - 11:00

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This gambling tech stock is future-proofing the world’s casinos

Supported by the universal thrill of a quick payout and the need for leisure, gambling stocks make a compelling case for long-term returns.
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Supported by the universal human thrill of a quick payout, and the need for leisure and entertainment to bring enjoyment to adult life, casinos will remain essential spaces for people to dream and play for the foreseeable future, making gambling stocks a prospective space to look for long-term returns.

According to Research and Markets, the global casino industry was valued at US$157.5 billion in 2022, and it will grow to US$224.1 billion by 2030 at a compound annual growth rate of 4.5 per cent. This trend includes:

Approximately 100 million gamblers in the United States, who generated US$66.5 billion in revenue in 2023, a 10 per cent gain from 2022, which itself was a record year A little fewer than 20 million gamblers in Canada, who generated about C$15 billion in revenue in 2023 A global addressable market of thousands of casinos, and more than 4.2 billion people who gamble at least once every year, according to a 2016 study by Casino.org

The main challenge with attracting these billions through casino doors is they sway heavily toward middle age. The mean age of U.S. casino visitors has hovered around 50 for the past decade, with a similar trend across the world, forcing casinos to attract younger, tech-savvy customers, many with less gambling experience, to continue growing profits for their stakeholders over the long term.

Investors seeking exposure to a leadership position in building the bridge between casinos and the next generation of gamblers should evaluate Jackpot Digital (TSXV:JJ). The Vancouver-based company is a manufacturer of dealerless electronic table games that deliver immersive experiences tailored to the digital age, while earning casinos attractive returns on investment.

The gambling technology stock benefits from no direct competition in the dealerless poker space, with orders spanning North America, Europe, Asia, Africa and the Caribbean, a long-established presence with major cruise ship brands, such as Carnival, Princess Cruises and Holland America, and a growing land-based presence with orders or ongoing installations across 12 U.S. states. Its highlight partnership to date is a master services agreement with Penn Entertainment, the country’s largest regional gaming operator with 43 properties across 20 states.

Jackpot Digital’s differentiated technology and well-rounded management team are at the heart of its success in landing several blue-chip casino gaming companies as customers.

Jackpot Blitz

The gambling technology stock’s flagship product, Jackpot Blitz, is a dealerless poker table featuring three of the world’s most popular variations – Texas Hold’ em, Omaha, and Five-Card-Omaha – brought to life through slick 4k graphics on a 75-inch touchscreen, and offered in three formats – pot-limit, no-limit and fixed-limit – designed to attract a diversity of revenue from casual to experienced players.

Spokesperson and NFL championship-winning coach Jimmy Johnson explains the benefits of the Jackpot Blitz. Source: Jackpot Digital.

The table also comes equipped with house-banked mini-games, including blackjack, baccarat and video poker, as well as side bets on the main poker game, such as Bet the Flop, all of which keep players engaged and entertained between, and even during, poker hands. The stunning Jackpot Blitz machine also offers multi-venue “Bad Beat” jackpot functionality, allowing casinos to offer a “Poker Powerball” with massive Jackpots, further enhancing the attractiveness of Jackpot Blitz to new players.

It’s by striking a balance between the needs of the modern gambler, and efficiency and profitability that in-person operators couldn’t hope to match – unless they ordered the machine for themselves – that Jackpot Digital has earned itself the top spot in dealerless poker.

Player benefits

When a veteran or novice gambler takes a seat at the Jackpot Blitz, his or her experience begins with an easy-to-use interface, laid out in a modern and stylish design, programmed to respond to hand gestures that bring real casino play into the digital age, including card bending and chip jingling.

Source: Jackpot Digital.

The table’s intuitive controls, combined with instant payouts and its dealerless nature, translate into faster game play, which maximizes playing time and player excitement, while minimizing human error and the intimidation new gamblers might feel about approaching an analog poker table. The gambling technology stock’s in-house development team is also constantly working on new games to keep content fresh, with a special focus on bringing international games and regional versions of poker to casino audiences in Asia, South America and the Indian subcontinent.

As hands are laid down and pots pile up, players can also track game stats in real time, which inform future strategy and enhance the thrill of the moment with an added element of competition.

Operator benefits

From an operator’s perspective, a floor of automated gaming tables can meaningfully and instantly reduce casino staff expenditures and management pain points, while avoiding wage inflation, labour shortages and supply costs.

The Blitz is no slouch on revenue either, dealing more hands per hour, resulting in higher revenue and higher profitability, which is further enhanced by onboard side bets and mini-games that can be played while players are engaged in a poker hand.

The Jackpot Blitz’s economics are attractive to operators thanks to its ability to accommodate non-stop play, while monetizing downtime through side games and bets. While a human dealer must spend time shuffling, interacting with players, and consulting with colleagues, the Jackpot Blitz can accept wagers 100 per cent of the time, making sure gamblers get the action they came for and operators see a return on their investment.

Source: Jackpot Digital.

Beyond gaming revenue, casinos are further incentivized to onboard the Jackpot Blitz because of its fully customizable advertising functions, including logos, card backs, chips and felt colors, all of which bolster casino culture and enable the pursuit of revenue from third-party advertising partners.

The Blitz ties its value proposition together by generating automatic reports – including demographics and consumer behaviour through a rewards card system – and plugging directly into most back-end management systems, saving casinos the hassle of manual tracking, while also minimizing tampering, money-laundering and theft through the use of isolated servers.

Whether it’s streamlining the player experience or putting automation at the service of operators’ bottom lines, Jackpot Digital’s flagship product is positioned to create value, and plenty of it.

Jackpot Digital’s path to profitability

After existing as an exclusively cruise-ship-based operation since 2015, Jackpot Digital suffered a steep decline in revenue during the COVID pandemic, falling from C$2.18 million in 2019 to C$0.42 million in 2021.

Management quickly pivoted in the face of uncertainty, redesigning the Blitz to execute on a land-based expansion strategy – backed by Gaming Labs International certification in fall 2023 – which is bringing about a successful turnaround after the re-emergence of the casino business. Revenue more than tripled to C$1.43 million in 2022, and reached C$1.57 million through three quarters of 2023, with the company expecting to ramp up significant recurring revenue after it installs several dozen machines currently in its backlog.

The Jackpot Blitz electronic gaming table in action. Source: Jackpot Digital.

The first installation of land-ready Jackpot Blitz machines is now completed at the Jackson Rancheria Casino in California, as the company announced today. The three-machine installation marks a new era of growth for the company, having announced 25 Blitz deals since November 2021 (slide 12), with many more across Canada and the United States in the works, in addition to a strong pipeline in Asia and Europe.

“Jackpot Digital could be a profitable company right now if it only focused on care and maintenance of the revenues it currently generates. But that’s not why we’re here,” Mathieu McDonald, Vice President of Corporate Development at Jackpot Digital, said in a recent interview with Stockhouse. “We intend to scale up to many multiples of the tables we have out right now, with the potential for up to 2,000 tables over the next three to five years.”

According to McDonald, the company is fielding three to five inquiries per week about the Blitz from casinos around the world that recognize the machines’ first-mover advantage in dealerless poker and potential expansion into other games in need of automation.

Jackpot Digital’s ambitious plan of action is supported by a management team of proven gambling, finance, advertising and legal professionals, many of which have been serving Jackpot stakeholders for more than two decades.

A long-tenured management team

The management team behind Jackpot Digital is led by Jake Kalpakian, who has served as president and chief executive officer since 1999, including under the gambling technology stock’s former incarnation as Las Vegas From Home.com Entertainment Inc. Kalpakian brings more than 30 years of experience managing small-cap publicly listed companies, granting him a steady hand when it comes to maneuvering through the volatility of the economic cycle.

Kalpakian’s efforts are supported by three directors whose well-rounded expertise positions Jackpot Digital for long-term sustainable growth:

Gregory T. McFarlane, a director at Jackpot Digital since 1999, previously ran an independent advertising firm and holds a degree in mathematics from the University of Toronto. McFarlane is also a co-founder of the popular Control Your Cash personal finance website. Chief financial officer Neil Spellman, a director at the company since 2002, boasts an almost two-decade track record as vice president at Wall Street firm Smith Barney, where he developed a multi-industry understanding of the journey to profitability. Finally, Alan Artunian, a director since 2017, currently serves as CEO of Nice Guy Holdings, a corporate and legal consulting company advising clients across a diversity of sectors.

Guided by a strategic management team, and benefiting from a macro-trend toward casino automation, Jackpot Digital is on course to ride a wave of millions of gamblers looking for an elegant, tech-informed alternative to traditional in-person play.

A multi-bagger opportunity

The Jackpot Digital opportunity sets up savvy investors who recognize the soundness of the company’s value proposition. The tremendous risk/reward value of Jackpot Digital gives investors the opportunity to ride the macro-trend toward casino automation, as deals for the Blitz keep pouring in, the company adds games to its portfolio, and the global casino industry adds hundreds of billions in revenue through this decade.

Join the discussion: Find out what everybody’s saying about this gambling technology stock on the Jackpot Digital Bullboard.

This is sponsored content issued on behalf of Jackpot Digital, please see full disclaimer here.

The post This gambling tech stock is future-proofing the world’s casinos appeared first on The Market Online Canada.

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Gates-backed PhIII study tuberculosis vaccine study gets underway

A large study of an experimental vaccine for the world’s biggest infectious disease has finally kicked off in South Africa.
The Bill & Melinda Gates…

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A large study of an experimental vaccine for the world’s biggest infectious disease has finally kicked off in South Africa.

The Bill & Melinda Gates Medical Research Institute (MRI) will test a tuberculosis vaccine’s ability to prevent latent infections from causing potentially deadly lung disease. Last summer the nonprofit said it would foot $400 million of the estimated $550 million cost of running the 20,000-person Phase III trial.

It’s a pivotal moment for a vaccine whose origins date back 25 years when scientists identified two proteins that triggered strong immunity to the bacterium that causes tuberculosis. A fusion of those proteins, paired with the tree bark-derived adjuvant that helps power GSK’s shingles shot, comprise the so-called M72 vaccine.

Thomas Scriba

After decades of failures in the field, the vaccine impressed scientists in 2018 when GSK found that it was 54% efficacious at preventing lung disease in a 3,600-person Phase IIb study.

But the Big Pharma decided that a full-blown trial was too expensive to conduct on its own. Gates MRI stepped in to license the vaccine in early 2020, right before the Covid pandemic shifted global vaccine priorities towards the coronavirus, further stalling the tuberculosis shot.

“There’s been frustration that it’s taken so long to get this trial up and running,” Thomas Scriba, deputy director of immunology for the South African Tuberculosis Vaccine Initiative, told Endpoints News last summer.

At last, the vaccine is getting a chance to prove itself in a bigger study. If successful, it could lead to the first new shot for tuberculosis in over a century.

Emilio Emini, CEO of the Gates MRI, told Endpoints that the initial results may come in roughly four to six years. “Hopefully this will galvanize a refocus on TB,” he said. “It’s been ignored for many, many years. We can’t ignore it anymore.”

A substantial impact

Even though an existing vaccine helps protect babies and children against severe tuberculosis, the bacterium responsible for the disease still causes roughly 10 million new cases and 500,000 deaths each year.

Emilio Emini

By vaccinating adolescents and adults who test positive for infections but don’t have symptoms of lung disease, the Gates MRI hopes the shot will help prevent mild infections from becoming severe ones, curtail transmission of the bug, which is predominantly driven by people with lung disease, and reduce deaths.

“The impact would be substantial,” Emini said. But he cautioned that the biology behind mild and severe diseases is still mysterious. “The reality is that no one really knows what keeps it under control.”

The study, which will take place at 60 sites across seven countries, will include some people who are not infected with tuberculosis to ensure that the vaccine is safe in that broader population.

“Having to pre-test everybody is not going to make the vaccine easy to deliver,” Emini said. If the vaccine is ultimately approved, it will likely be used in targeted communities with high tuberculosis, rather than across a whole country, he added. “In practice, you would immunize everybody in those populations.”

Emini described the Gates MRI’s rights to the vaccine as “close to a worldwide license.” GSK retained rights to commercialize the vaccine in certain countries but declined to specify which ones.

A spokesperson for GSK said that the company “has around 30 assets under development specifically for global health … none of which are expected to generate significant return on investment.”

“It is not sustainable or practical in the longer term for GSK to deliver all of these alone. So we continue to work on M72, but in partnership with others,” the spokesperson added.

If the shot works, Emini said that the Gates MRI will sublicense it to a manufacturer that will be responsible for making and marketing the vaccine. The details are still being worked out, he noted.

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